European index of prices developed to compare the inflation rates of the member states of the European Union.
In order to facilitate comparison of inflation between countries, EU member states calculate a harmonised index of consumer prices (HICP) according to internationally agreed definitions and methods. Eurostat calculates the inflation for the euro area and the European Union based on the HICP figures of all EU countries. The European Central Bank (ECB) uses the HICP to formulate its monetary policies for the euro area. Most countries also produce their own national consumer price index.
For the Netherlands, an important difference between the consumer price index (CPI) and the HICP is that the HICP does not take account of price changes related to home ownership while the CPI does. In the CPI, these changes are calculated based on changes to rental property prices. Another difference is that the CPI includes spending by Dutch households abroad, while the HICP does not.